Mood of American shoppers improved markedly in December, following Donald Trump's surprise victory in the US presidency elections, official figures revealed on Friday. The University of Michigan reported its preliminary Consumer Sentiment Index jumped to 98.0, the highest reading since January, while marked analysts anticipated a slighter improvement to 94.3 from November's 93.8 points. Confidence among consumers rose shortly after the elections. The Current Conditions Index, which measures the way consumers feel about the present state of the economy, advanced to 122.1 in December from the preceding month's 117.3 points, the highest level since 2005. A record number of survey respondents pointed to the positive effects of new policies.
Furthermore, the survey showed the proportion of people expecting the economy and labor market to improve next year also increased in the reported month. The gauge of expectations six months from now climbed to 88.9, the highest since January 2015, following the prior month's 85.2 points. Consumers' inflation expectations for the next year declined to 2.3%, the lowest level since 2010, compared with November's 2.4%, while their expectations for inflation over the next 10 years fell to 2.5% from 2.6%.
US Monthly Budget Statement is the only event today
On Monday there is only one relevant event that is likely to have some impact on the USD/JPY pair's performance, namely the US Monthly Budget Statement. It summarizes the financial activities of federal entities, disbursing officers, and Federal Reserve banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD.USD/JPY sets eye on 116.00
Friday ended with the Greenback posting solid gains versus the Japanese Yen, with the 115.00 level being easily overcome, as the 114.50 psychological resistance failed to limit the gains. According to technical indicators, the USD/JPY is to keep edging higher today, but with gains unlikely exceeding 100 pips, as the weekly R1 and the upper Bollinger band form a relatively tough resistance area circa 116.35. A bearish development is doubtful, due to the Buck being supported by a four-week up-trend, which in turn is reinforced by the weekly PP, the weekly S1 and the 23.60% Fibo.Daily chart
Market sentiment did not change over the weekend, with 60% of traders being short and the remaining 40% being long the US Dollar. At the same time, the share of sell orders increased from 48 to 59%.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 60% of OANDA clients are bears, unchanged since Friday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 51% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar